A 4% move in 4 hours. At least with the gold bubble out of the way, stocks are fully apprised of what to anticipate. Somewhere Tim Geithner is congratulating himself for a strong dollar job well done. Of course, this does little to resolve the several trillion of worthless crap on bank balance sheets whose "value" just went in the non-FDIC preferred direction. And thus the Sec Tres is reminded why he is scroomed: there is no way out now - either jobs have to revert to trendline (the BLS would need to, ironically, hire humans over Kool-aid infused monkeys to do the next data analysis), or banks will be soon knocking on Sheila Bair's door, reminding that they were just kidding about that TARP payment. In that sense Napoelon Iceman Dynamite, Fred Mishkin is correct that gold is merely a sideshow.
It doesn’t take a fancy European name like Jan or a PhD to take the guesswork out of the
monthly Non-Farm Payroll data. A simple 3-factor model can predict payrolls within spittin’ distance of the actual post-revision result. The monthly average of the 4-week moving average of initial unemployment claims (sa), the monthly average of the insured unemployment rate (sa), and the %Y/Y change in employee withholding taxes.
The economy is so hot, that democrats in Congress are now moving with yet another stimulus package, this one for $170 billion, targeting bankrupt states and formerly surging unemployment (Obama has some TV appearances today; the BLS will be back to its previously scheduled job collapse next month). In other news, Japan did approximately 10 such small scale bailouts even as its market proceeded to keep probing new lows over the last two decades, and as reinvested 3x its annual GDP in comparable such one-time boosts to the economy without doing anything to prevent its current deflationary collapse.
Ratigan Grills Propaganda Queen Christina Romer, Demands Windfall Profit Tax Clarity, Gets Blank Stare ResponseSubmitted by Tyler Durden on 12/04/2009 - 13:32
Ratigan cuts to the chase, bypassing the hollow rhetoric by Administration propaganda queen Christina Romer, who can't beat enough drums on today's pathologically ludicrous BLS numbers, yet is completely unwilling to discuss how the White House will proceed to recoup any of the taxpayer-subsidized windfalls at Wall Street firms. Any considerations of windfall tax, be they in the form of a Tobin tax, now openly supported by such people as Warren Buffett and John Bogle, or directly imposed, seems to not be on the White House's agenda currently or any time in the future. How is it so difficult for Obama to understand that Main Street is demanding some quid-pro-quo of firms like Goldman, whose employees are covertly purchasing Ferraris even as excess bank reserves hit another all time record yesterday, and instead of lending money out the banks continue to collect a risk-free 0.25% on these excess reserves, thereby once again picking taxpayers' pockets.
"We have been making a case for long USD positions against JPY, AUD, and EUR recently. A quick look at the DXY chart shows that a close through the 50-dma would trigger a collapse of a massive carry trade. We are no there yet, but there are reasons to believe it is a strong possibility." - Nic Lenoir
After opening at 58, Nakheel 3.1725%'s are now trading at an all time low of 54. Does someone know something ahead of the weekend, or has QVT decided to simply take its losses and move on? Or does Dubai's ghost simply refuse to go away.
Jan Hatzius' mea culpa, after the BLS decided to kick the the NFP consensus squarely in the shins, is lacking. Most notable the discussion about lagging wage increases: you can't have inflation when people are making less then (or the same as) they used to make in nominal terms.Where is the marginal difference coming from: why the JPMorgan Chase Gold-plated Tungsten credit card of course.
The man who brought down Galleon is not finished, and if the report by Reuters' Matt Goldstein is correct, FBI special agent B.J. Kang may well have his sights set on the top of the hedge fund pantheon: SAC Capital itself. This is not a surprise to Zero Hedge, and is something we have speculated on in the past, however the intricacies of such a spectacular take down would have to be refined beyond any reasonable doubt as any allegations against Mr. Cohen will likely see the involvement of every single $1,000/hour billing lawyer in the world, taking on any DOJ case.
Major move in Fed Fund futures today, with the implied probability of a rate hike to 1.25% by November 2010 nearly doubling to 14% from 8.1%. In fact major move to the right across the spectrum, as expected Fund rates at 1% or higher surging by over 50% and now coming it at 45.4% compared to 31% as recently as yesterday. The inflation hawks case just got stronger by about 50% as well. Yet with trillions more in bad real estate assets on bank balance sheets still needing Fed purchases, the Chairman is truly between a rock and a hard place.
With today's highly suspicious BLS job data (we are waiting to hear from TrimTabs' Charles Biderman for his take on this number) we would like to highlight some of the majorly broken correlations that are getting broken today and causing major pain for traders on the other side. And while any statistician will tell you correlation does not imply causation, in this market of low volume algo trading, correlation is likely the only thing that implies causation. The questions now: i) when does Bernanke succumb to the inflation hawks who will beat the drum on tightening even louder, and ii) will the fund flows out of bonds into futures be enough to offset the dollar surge, whose natural expression is to push stocks lower.
Unemployment Drops Amazingly To 10%, NFP Down 11.000 Much Higher Than Consensus, 17.2% U-6 UnemploymentSubmitted by Tyler Durden on 12/04/2009 - 09:39
Hatzius' -100,000 is likely right, as usual, and the government will simply unrefudge all the data retroactively. Can't have the Chairman's reconfirmation be accompanied by factual economic releases. Especially not from the econometric champions at the BLS.
- Asian stocks, oil retreat as US service economy slows; Korean Won gains.
- Crude oil fell for a third day on report showing US Srvcs industries unexpectedly contracted.
- Payrolls in US probably decreased at slower pace in November: Bloomberg Survey.
- Venezuelan banks seem to be on the verge of a crisis, stoking fears of nationalization.
- Abercrombie, Macy’s report drop in business in Nov as discounts failed to persuade shoppers.
- Bank of America raises $19.3B in biggest US stock sale since 2000.
- China Shipbuilding plans to raise as much as $2.15B in Shanghai IPO.
RANsquawk 4th December Morning Briefing - Stocks, Bonds, FX etc. (Nonfarm Special)
Even with declining initial unemployment claims being trumpeted to great Comcastic fanfare as a sure sign of the end of the Apocalypse, and the Seasonally Adjusted Insured Unemployment number now down to 5.465 million, (dropping from an early August peak of 6.904 million), the one number consistently forgotten is the exhaustion transfer as more and more jobless no longer qualify for traditional 6 month unemployment insurance (being unemployed for more than half a year will do that to you). Nonetheless, combining the two data series presents a much uglier picture: adding the 3.859 on Emergency Unemployment Compensation to those on current benefits yields a total of 9.3 million who are suckling at Uncle Obama's teat! Furthermore, the series has ticked higher recently even as initial claims have continued declining. The combined number is a mere 175k off the all time high in this cumulative data series of 9.5 million recorded in late July. Additionally, at the market bottom in March the combined number was just under 7 million, meaning that as the market has rallied over 60%, the economy has lost 2.5 million workers! And don't forget that over the past 6 months an additional set of workers has rolled off the even extended EUC insurance benefits, which according to some estimates could be higher than 1 million (cumulatively) over the past 6 months. As this data is lost somewhere in the limbo of U-6, we can only extrapolate what the attached chart would look like if it captured not just those who collect the weekly $400 or so from Zimbabwe Ben, but also those who no longer are eligible.